The Long Term Investor

Good commentary above.

WELL....we got the markets open today. That is about all I can say about it. We will see if this FEAR FOG burns off over the next few hours.

 

OBVIOUSLY...this is the reason for the open. I said the other day I expected the jobs numbers to be much worse than anticipated.....the reason is ALSO obvious.

Private companies added 330,000 jobs in July, according to ADP, far short of the 653,000 estimate

https://www.cnbc.com/2021/08/04/pri...-to-adp-far-short-of-the-653000-estimate.html

(BOLD is my opinion OR what I consider important content)

"Key Points

• The 330,000 new positions is a sharp deceleration from the 680,000 added in June and the lowest total since February.
• Leisure and hospitality led the gains with 139,000 during a month in which goods-producing industries contributed just 12,000 jobs.

Job creation at private companies tumbled in July as fears mounted over the spreading Covid-19 delta variant, payroll processing firm ADP reported Wednesday.

Employers added 330,000 positions for the month, a sharp deceleration from the downwardly revised 680,000 in June. It’s also well below the 653,000 Dow Jones estimate. June’s final total fell from the initial estimate of 692,000.

July’s job growth was also the smallest gain since February.

“The labor market recovery continues to exhibit uneven progress, but progress nonetheless,” ADP chief economist Nela Richardson said. “July payroll data reports a marked slowdown from the second quarter pace in jobs growth.”

Markets fell after the report, with Dow futures down nearly 120 points and most government bond yields pulling back.

According to ADP, the biggest job gains for July again came in leisure and hospitality, which added 139,000 payrolls. Education and health services added 64,000 while professional and business services increased by 36,000.

Goods-producing industries contribute just 12,000 to the total, with manufacturing up 8,000. Natural resources and mining gained 3,000, and construction added just 1,000 new positions.

From a size standpoint, companies with 50 to 499 employees added 132,000 jobs. Bigger firms added 106,000 while small business payrolls increased by 91,000.

The ADP count, done in conjunction with Moody’s Analytics, comes two days before the more closely watched Labor Department nonfarm payrolls release. The two reports can differ significantly but have been fairly close this year: Through June, ADP had averaged about 30,000 fewer jobs a month than the official government tally.

Unlike ADP, the Labor Department’s count includes government jobs and is expected to show a total gain of 845,000 after June’s 850,000 increase.

The letdown comes amid concerns that the spreading delta variant could contribute to an overall climate that indicates the post-recession economic boom is slowing. Though the variant’s spread is largely concentrated among a handful of states where vaccinations are low, the total case count has eclipsed the peak of the original Covid spread and is sparking worries that it will slow activity.

The economy is also in the throes of an aggressive inflation wave, though economists and policymakers largely see the current factors as temporary and likely to ease ahead.

“Bottlenecks in hiring continue to hold back stronger gains, particularly in light of new COVID-19 concerns tied to viral variants. These barriers should ebb in coming months, with stronger monthly gains ahead as a result,” Richardson said.

Federal Reserve officials have echoed the transitory theme but have vowed to keep monetary policy loose and interest rates low until the employment picture shows greater progress.

Fed Governor Christopher Waller told CNBC on Monday he would be willing to start reducing the pace of the central bank’s asset purchases if the August and September jobs reports are strong."

MY COMMENT

The above article TOTALLY misses the point on this issue. It is NOT Delta or inflation that is causing these bad numbers. It is the continued FREE MONEY that is keeping people at home with no concern about finding a job. It is ALSO....no coincidence.....that the $300 in FREE MONEY for each KID started in July. Why in the world would many people go out and get a job when they can sit home and collect $1200 per month over their unemployment PLUS from $300 to $1200 more for having 1-4 kids.

The unemployment and gorvernment numbers are also LIKELY to be DISMAL. BUT.....that is FINE for me.....I see these bad numbers as very positive for investors going forward.

 

I have been seeing a BIT of this with people in everyday life lately.

Weekly Market Pulse: Trading Places

https://alhambrapartners.com/2021/08/01/weekly-market-pulse-trading-places/

(BOLD is my opinion OR what I consider important content)



"They’re out there panicking right now. I can feel it. They’re out there. They’re panicking. Look at them.

– Eddie Murphy as Billy Ray Valentine in Trading Places"

"I thought of that scene the other day when a good friend in the investment business told me that investors today are panicking into the market rather than out as they were last spring. I have to say, I find it hard to disagree with him but I think there are specific parts of the market where panic is more obvious than others. For instance, 10-year TIPS yields are trading at all-time lows. While I often describe real rates as an indication of real growth expectations, TIPS yields also represent demand for inflation protection. Right now, investors are willing to accept a negative yield of 1.15% just to have protection from inflation. I’d say that is a bit panicky. I was taught many years ago not to worry about things that are already well worried. I guess I can strike inflation off my list (maybe).

Most people think of stocks when we say “the market” and US stocks are certainly expensive. There is a must-own list of stocks everyone is familiar with and most of those are very expensive. Alphabet, Apple, Netflix, Facebook, and Amazon are great companies but they are not cheap. And we found out last week what happens when one of these high-priced stocks disappoints the market. Amazon fell 7.5% Friday after its earnings report disappointed investors. Having said that, I’m not sure investors are panicking into these stocks. It isn’t like in 1999 when “investors” were paying 100 times earnings for Cisco. Make no mistake, stocks are expensive and people aren’t buying because they want to but rather because they feel like they have to. But I don’t think they are panicking into “stocks”. When my friend says they are panicking into “the market” what he really means is they are panicking out of bank deposits or other safe assets.

From a larger perspective, I’ll offer some anecdotal evidence from our own business. Our business is growing rapidly and we talk to a lot of investors. That isn’t new but I have noticed a difference recently that I think confirms to some degree what my friend said about people panicking. We have recently talked to a lot of investors who have all cash or near all-cash portfolios. Some of them got out at the onset of the pandemic and others have been sitting on the sidelines for much longer. They seem to have reached their breaking point and feel like they have to get invested. I don’t worry about that too much with our portfolios because stocks are a smaller part of our allocation than most other advisors. We own 5 asset classes while most investors only own two. If they own a third (usually gold), they own it in such small quantities that it would never make much difference to the outcome. But if we’re seeing this, other firms are too and at most of those firms, clients are only going to get the standard stock/bond portfolio with the larger part in stocks. People are panicking into one of the most expensive stock markets in history because safe assets don’t pay. I’m not sure that is exactly the result the Fed wanted but it is certainly the one they’ve achieved.

I think this panicky behavior probably explains some of the recent demand for bonds as well. There has been a general sense of disbelief about bond yields in recent months (although not around here) as the 10-year yield dropped from 1.75% to the current 1.24%. Here at Alhambra we are generally in the Occam’s Razor camp and take these things at face value. Falling bond yields mean falling growth expectations. I’ve been writing all year that expectations of some kind of post-pandemic economic boom were misplaced and I think I got a little wood on the ball with that one. But even here, we understand that there have been some unique supply/demand dynamics playing out recently that favored higher bond prices. Treasury issued fewer bills, notes, and bonds over the last quarter as they drew down their general account at the Fed. One of the results of that is that banks had a large inflow of deposits which they generally used to buy Treasuries and MBS. And of course, the Fed continued its buying spree. Add to that the demand from investors fleeing cash deposit rates of basically 0% and you get a bond rally that no one “expected”. Decreased supply + increased demand = higher prices isn’t all that difficult to understand.

And yes, the economic recovery has slowed, although I would not say it has “stalled” as I heard someone say recently. The rate of change has probably peaked – although I suppose we could get another surge post-Delta variant – but the trajectory is still up. The economic slowdown is obvious in the recent economic releases but most of them are still positive. Durable goods orders released last week were less than expected but still positive. And within that report, core capital goods orders were up a healthy 0.5%, the 15th consecutive monthly gain. More importantly, I think, is that this series has finally broken decisively above the 2000 peak. Yes, 2000.



Personal income and consumption numbers were both better than expected when reported last week. More important was the composition of both, where private wages and salaries outpaced a drop in government benefits, and services spending more than offset a decline in durables which was mainly in autos and unsurprising in the least if you’ve visited a car dealership recently.

The big disappointments last week were in housing and of course 2nd quarter GDP. New home sales and pending home sales were both down which is primarily a result of the 17% year-over-year rise in prices which was also reported last week. I am not worried in the slightest about housing though. We have not built nearly enough housing since the last bust and I expect builders to be playing catch up for several years to come. Prices are a self-solving problem. GDP growth in Q2 was quite a bit less than expected but the details were not bad in my opinion. Personal consumption of services led the way, a flip from Q1 when goods spending led. Gross private domestic investment fell but that was mostly about investment in structures whether non-residential or residential. Again, that is not exactly a shocker to anyone who has been paying attention. And I don’t see how residential investment can’t increase over time despite the odd down quarter. The other big drop in investment was in inventories which, again, isn’t a surprise if you’ve been watching inventory/sales ratios which are right at all-time lows. That is at least partially about supply issues but also concern about future goods spending. We’ll see how that plays out but recent inventory reports were up so that problem may already be on the way to being solved. One last area that subtracted in the quarter was net exports, where imports once again grew faster than exports. That isn’t good news about the rest of the world and that is concerning but it doesn’t show domestic weakness.

So, investors may be panicking a bit but some of the enthusiasm for investing is justified by current economic conditions. The economy is growing above trend right now. As I’ve said in the past, I can’t predict the future so that could obviously change abruptly but if it does it probably won’t be from anything anyone is worried about right now. Let’s hope Hasbro has a good supply of GI Joe’s with the Kung Fu grip (if you didn’t see the movie that won’t make sense)."

MY COMMENT

UNFORTUNATELY.....when the CASH people start to panic buy that is usually an indicator of a market top. They are UNERRINGLY accurate as a contrary indicator. This is exactly why the average investor can not get anywhere near the returns of the un-managed averages.

So....today we have one......perverse indicator.....the bad jobs number....that I think is a nice POSITIVE......and......another noted in the article above that I think is a NEGATIVE. Not really concerned.......this is short term stuff.....and my view is as usual....we have at least 12-24 months of good business ahead as the world re-opens. This little Delta scare is also a good indicator for business and investors going forward in my view.

 

HERE is the general market view today....so far.......I think we actually have a good shot at the markets ending POSITIVE today.

Stock market news live updates: Stocks decline after weak jobs data offsets strong earnings

https://finance.yahoo.com/news/stock-market-news-live-updates-august-4-2021-221602450.html

(BOLD is my opinion OR what I consider important content)

"Stocks fell below record levels Wednesday, with investors weighing concerns over the economic impact of the ongoing pandemic against optimism over rebounding corporate earnings.

The S&P 500 opened lower a day after the index reached a record closing high. The Dow also fell, while the Nasdaq was little changed.

Investors considered a much weaker-than-expected report on private payroll growth last month. ADP reported that private-sector employers added back just 330,000 jobs in July, or fewer than half the expected gain of 690,000, according to Bloomberg consensus data.

The print, while typically an imprecise indicator of the Labor Department's monthly non-farm payrolls reports, was nonetheless an indication of a labor market still struggling to recoup all of its pandemic-era losses. Friday's "official" July jobs report is still expected to reflect a pick-up in hiring and the return of more workers to the labor market last month, helping to alleviate some of the labor scarcities rampant across industries.

Meanwhile, corporate earnings results from major U.S. companies continue to track mostly strongly. Shares of ride-hailing company Lyft (LYFT) gained after the company unexpectedly delivered adjusted EBITDA profitability for the first time since going public in 2019, with a pick-up in ridership during the reopening helping to fuel results. Oil and gas company Occidental Petroleum (OXY) also posted a surprise adjusted profit as energy demand rebounded.

Estimates-topping results from these and a myriad of other major U.S. companies have helped buoy stocks even as jitters around the spread of the Delta variant and concerns around a regulatory crackdown in China lingered. Treasury markets, however, have reflected some of these concerns, with the benchmark 10-year yield back below 1.2% and holding at the lowest levels since mid-July.

"Certainly when it comes to the Delta variant, that has been a driver of rates moving lower. And certainly concerns around China have also been a headwind. We do think those are largely driven outside the U.S., so when it comes to domestic factors, domestic growth actually looks fairly solid," Stephanie Roth, JPMorgan private bank senior markets economist, told Yahoo Finance. "We expect over the long run domestic factors should win out and rates should move higher."

In terms of equities, "Tactically, cyclicals should do fairly well, so we're bar-belling cyclicals and tech here, and we think rates should certainly trend higher over the next 12 months," Roth added.

10:06 a.m. ET: U.S. services sector expands by the most on record in July: ISM
The Institute for Supply Management's July services index surged to a record high in July, with business activity rising as consumer mobility and travel demand picked up over the summer.

The ISM services index reached an all-time high of 64.1 last month, rising from 60.1 in June, according to the monthly report. This was well above estimates for 60.5, according to Bloomberg data. Readings above the neutral level of of 50.0 indicate expansion in a sector.

Beneath the headline index, a number of subindexes also posted strong growth for the month. The ISM employment subindex rose to 53.8 from 49.3 in June, flipping back into expansionary territory. New orders also accelerated, as did overall business activity and production. Still, however, ISM flagged that "materials shortages, inflation and logistics continue to negative impact the continuity of supply," according to its report Wednesday.

9:43 a.m. ET: Robinhood shares halted for volatility after second straight day of stock surge
Robinhood (HOOD) shares rocketed higher by 65% Wednesday morning to reach an all-time high of $77.03 a share, according to Yahoo Finance data. The surge triggered a volatility halt shortly after market open.

The stock surpassed its IPO price of $38 per share after languishing below this level for much of the past week. Shares began trading on the Nasdaq last Thursday.

A day earlier, Robinhood shares also jumped after Cathie Wood's ARK Innovation Fund disclosed a stake in the newly public online brokerage firm."

MY COMMENT

UGHHHHH.....I see the social media GAMBLERS/TRADERS/SPECULATORS are doing their thing with Robinhood. Robinhood will probably be the most valuable company in the USA in about 3 days......LOL. The RACE IS ON. Another indicator of.......I dont have any idea....I guess HUMAN NATURE and human brain function.

I have a handyman coming today to hang some lights outside on the patio. So.....as usual lately I will be tied up much of the morning......I have to SUPERVISE.

We will see if the POWER of earnings and actual company fundamentals have the POWER to cut through the short term BALONEY today. I think so....but.....I am not betting anything on it.

 

Good point RG.....I have never had any issues using any of the functions or tools on Schwab with a Macbook Pro....or any other decent PC.

 

TALK about INFLATION.....no not the kind that we see in the media day after day as a typical.....beat to death....topic. I mean the number of BILLIONAIRES.

They seem to be exploding. It is really making me feel.....INADEQUATE. Every celebrity, every singer, every actor....starts some production company.....or a Tequila company....or whatever...and next thing you know they are a BILLIONAIRE. I see today that now Rihanna is one.

It used to actually mean something to be a MILLIONAIRE.......now nothing. Reminds me of the character on "Silicon Valley"....with car doors that....."go like this"......"these are not the doors of a Billionaire, Richard"......the......."3 comma club".

(SEVERE WARNING..... MUCH PROFANE language not suited for kids in this clip) Of course.....that is why everyone will watch it.....BUT....I am not joking about the language.

The Top 10 Most Memorable Russ Hanneman Quotes (Silicon Valley)

 

I see that the NASDAQ is now the FIRST of the averages to fight it's way back to positive today.

 

HERE....is a definite general market risk that we would see as soon as a month or two from now.

Markets Primed for Powell Second Term at Risk From Surprise Pick

https://finance.yahoo.com/news/markets-primed-powell-second-term-090001015.html

(BOLD is my opinion OR what I consider important content)

"(Bloomberg) -- On Wall Street, investors are banking on another four years for Jerome Powell as chair of the Federal Reserve -- introducing a potential risk for President Joe Biden should he opt to replace him.

“My view is that he would be the right choice and I think that the financial markets also believe that he would be the right choice,” said Bob Diamond, chief executive officer and founder of Atlas Merchant Capital and the former head of Barclays Plc. “I don’t believe there is another candidate who kind of has a consensus around him.”

Diamond’s take aligns him with the bulk of Fed watchers. Forty among the 50 economists Bloomberg surveyed on the question last month anticipated that Biden will restore a decades-long tradition of reappointing a presidential predecessor’s Fed chief. Donald Trump broke the pattern in elevating Powell, then a Fed governor, to chair in 2018.

The Fed is now heading toward its first tightening under a new policy framework, adopted a year ago, which pays greater attention to parts of the labor market that historically hadn’t enjoyed the gains others had by the time the Fed began raising rates. Powell himself said last week the new arrangement will face a “test” when it comes time to boost rates.

“The Fed is going on a new limb here since the pandemic. It’s taking on a more progressive social outlook as part of its policy,” said Gary Pollack, head of fixed-income for private wealth management at Deutsche Bank. “If Biden does not re-appoint Powell there will be a negative bond-market reaction,” he said, citing potential concern about the Fed “losing its focus on inflation” in favor of social goals.

Among the reasons behind the tradition of reappointments were that retaining the existing central bank chair lent the continuity to policy-making that investors liked and also strengthened the Fed’s independence by removing suggestion of a president exerting political influence. Even Ronald Reagan in 1983 left in place Paul Volcker, whose policy tightening had triggered a recession.

Stability was the watchword. And so it remains for investors anticipating that the Fed will be withdrawing its monetary stimulus possibly as soon as later this year, and preparing the ground thereafter for raising interest rates. That would pose a full slate for a new chair taking office in February.

“Replacing Powell right now is like changing your pilot in the middle of a turbulent landing,” said Max Gokhman, head of asset allocation at Pacific Life Fund Advisors.

Others said investors would take news of a Powell replacement in stride, if it proves to be a central bank veteran.

The most likely alternative is Lael Brainard, who’s been on the Fed board for more than seven years and previously served as a senior official at the Treasury Department and at the White House National Economic Council. Federal Reserve Bank of Atlanta President Raphael Bostic was the other potential candidate receiving votes in Bloomberg’s survey last month; he would offer Biden the chance of nominating the first Black, and openly gay, person to run the Fed.

Wall Street would be content with a familiar face with experience in monetary policy such as Brainard or Bostic, said Charles Myers, chairman and founder of Signum Global Advisors.

“The economic team in the White House are incredibly smart, and aware of potential market fallout if they try to go in a direction that would be disruptive to markets,” said Myers, a former vice chairman of Evercore.

But a more liberal candidate could prove particularly unsettling, in the minds of many.

“The fact that he has been kind of drifting left, or drifting progressive, whether it’s on climate or income inequality -- I think that that’s consistent with what the administration would want,” said Erika Karp, the founder and CEO of Cornerstone Capital Group, a self-described socially conscious investor. “So if there is a new appointment that is further left -- I think that would be problematic for the markets,” she said.

Even for a central bank veteran, overseeing monetary tightening can be testing. Powell had been on the Fed board for almost six years by the time he took the top job. Yet in late 2018, his comments spurred volatility in markets as he stuck to a more hawkish line than some traders felt was warranted -- such as leaving a shrinking of the balance sheet “on automatic pilot.”

Next year, it’s possible that some members of the policy-setting Federal Open Market Committee will be arguing for a more aggressive timetable of stimulus withdrawal. A fresh set of regional bank presidents rotates on to the FOMC in the new year, a group that on balance Fed watchers say could impart a hawkish tilt -- adding a potentially tricky element for a new Fed chair.

“The question the market would have -- and I would have -- is will this person be able to steer the committee in the direction he or she prefers? Will they have the ability to do that -- which is not a simple thing,” said Roberto Perli, a partner at Cornerstone Macro LLC. “Powell has the confidence and respect of most of the committee. Anyone else will have to earn that.”

Perli, who previously worked on monetary policy at the Fed as a senior staff member, said, “What worries me is that this is the first time in modern memory that a Fed chair position is open when Fed policy is not on an obvious course.”

In other words, the Fed chief in 2022 won’t be simply overseeing a pre-set course for tightening, but will have to lead the actual drafting of such a course. Removing Powell means a step into the unknown, raising risk in the bond market of “overall higher volatility in rates and higher rates,” Perli said."

MY COMMENT

I dont care about politics.....but I do have concerns about politicizing the FED. In addition any change at this time.....while we are still in the middle of recovering the economy would be very negative. it would inject UNCERTAINTY into the markets and the economy at a time when it is ABSOLUTELY not needed.

I could see this as a MINI-BLACK-SWAN event that triggers a correction in the markets......IF.....it happens. I believe any appointment is LIKELY to happen in September or October this year to have time for Senate confirmation.

At least people are ALREADY talking about this and anticipating what MIGHT happen. That will help to lessen any PSYCHOLOGICAL impact of a change. AND....of course.....it POWELL is reappointed.....that will be a good thing for market stability.

 

Been in and out all day....and...just realized that I never looked at my account today. YES....I am in the red....but....only by 0.07%. Gives me HOPE that we will see a positive day by the end of the day.

Emmett.....where are you? We need you today....do your magic.

 

Emmett makes a few calls at 11:54 Central time. And....I am now GREEN by.....0.01%.....at 12.54 Central Time. Now that is SUPERIOR service. Talk about having CONNECTIONS.

 

Emmett.....THE MAN!! I ended the day in the GREEN......way to go Emmett.....by 0.01%. BUT.....what I am really happy with is beating the SP500 by 0.47% today. AND......beating it by a total of 0.95% over the past three days.

It has been a nice little run in a very SHAKY market. One day my non tech holdings carried me.....the other two it was my tech holdings with different winners on different days. My portfolio MIX has been holding me up nicely for some of these difficult market days lately. I have gained nearly 1% over the SP500. I am now at +18.97% year to date versus the SP500 at +17.21% year to date.

If I can keep it up I might be able to build up a bit of a cushion over the SP500 for when my holdings go COLD later in the year.

 

I am sure there are many on here doing as well or better....but....it is NOT a competition against anyone else. I am COMPETING against the SP500 and myself. That is why I........NEVER.....second guess how I am doing versus any other "person".

I am very pleased with where I am for the start to the rest of the year. I have a nice CUSHION.....compared to my GOAL of averaging 10% annually long term.....and where I stand this specific year. At this point I could ABSORB a 9% correction and STILL be at my long term average goal of 10%.

We are looking at three GREAT years in a row for the SP500.....+31.44% in 2019......+18.39% in 2020.....and potential for as high as +25% this year. THIS....is how you REALLY see a big jump in the long term compounding when you can string together three years like we have the potential to do this year combined with the last two.

 

We have SOME potential for tomorrow.....I would guess it will be an up-in-the-air day to start tomorrow at the open. Not as bad as today but probably just as SQUIRRELY.

Stock market news live updates: Stock futures drift higher ahead of jobless claims, earnings

https://finance.yahoo.com/news/stock-market-news-live-updates-august-5-2021-221916335.html

(BOLD is my opinion OR what I consider important content)

"Stock futures opened slightly to the upside Wednesday evening as investors awaited more earnings and data on the labor market's recovery.

Contracts on the S&P 500 traded a tick above the flatline. The blue-chip index had ended the day in the red, pulling back from Tuesday's record closing high. The Dow also ended lower, while the Nasdaq eked out a higher close.

Some of the closely watched companies that reported earnings results after market close on Wednesday disappointed relative to Wall Street's consensus estimates, punctuating what has otherwise been an exceptionally strong second-quarter earnings season. Ride-hailing giant Uber (UBER) posted a wider-than-expected adjusted EBITDA loss for the second quarter, a day after smaller rival Lyft (LYFT) unexpectedly reported an adjusted profit during the same period. And shares of Etsy (ETSY) sank after the company delivered a current-quarter sales forecast that came in short of estimates, vindicating many traders' fears over a sharp slowdown in e-commerce growth during the second half of this year.

Aside from these blips, however, most major companies have posted second-quarter results that exceeded estimates. As of last Friday, 59% of S&P 500 companies had posted results, and 88% of these had beaten Wall Street's earnings per share estimates, according to FactSet's latest data. The expected earnings growth rate for S&P 500 companies is tracking toward 85.1%, which would be the biggest jump since the fourth quarter of 2009.

"The near-term power behind the market is insanely strong earnings. There's very little sign that they're not going to continue to be strong through the end of the year and into next year," Jonathan Golub, chief U.S. equity strategist for Credit Suisse, told Yahoo Finance on Wednesday. "But you are starting to see maybe cracks on the edge, if you will, that are making this a little more difficult. And where it's showing up is not in the market overall, but in the sectors and the groups of stocks and that leadership, and there's a bit more rotation going on there."

Over the past month, defensive sectors including utilities and healthcare have outperformed as concerns over the spread of the Delta variant resurged. For the year-to-date, however, the cyclical sectors of the S&P 500, including energy and financials, have remained the major outperformers, consistent with investors' convictions that this year would be one of recovery for the broader economy relative to last year's lows.

Interest rates also dipped again on Wednesday, with the benchmark 10-year yield briefly reaching the lowest level in six months at under 1.13%. The move lower coincided with more concerning signals on the pace of the economic recovery, with private payrolls rising by just 330,000 in July, or less than half the consensus estimate, according to ADP's latest monthly report on Wednesday. Still, however, over recent data have been more positive, with the Institute for Supply Management's July services index jumping to a record high even as company survey respondents cited ongoing supply chain disruptions and shortages.

"We've got some difficulty in logistical challenges, we have some inflation that's causing some indigestion at the moment," Michael Vogelzang, Captrust chief investment officer, told Yahoo Finance on Wednesday. "But specifically the Delta variant of COVID-19 is actually potentially positive for the stock and bond markets, mostly because yes it may induce a bit of a slower economy, but frankly the economy is booming and it wouldn't be the end of the world to slow it down a bit. But it also might give the central banks around the world a little more cover to continue to provide some more liquidity than what I think the market's been expecting. That could actually accelerate or extend some of the bull market action." "

MY COMMENT

Sounds right to me. The BLIP we are seeing with the re-opening is going to be a good thing over the longer term and WILL prolong the BULL MARKET.

I DEFINITELY expect the jobless claims and unemployment numbers that are going to be reported over the next couple of days to....SUCK for the economy. BUT.....that is....GOLDEN for the long term health of the BULL MARKET.

 

Robinhood....was the stock of the day.....at least for the SPECULATORS that follow social media and Cathie Wood. UP by 50% today or $23.59. A testament to the power of Cathie Wood to move the markets. NO.....I will not be buying this stock.

 

BUMMER....if this happens it will be a medium hit for NVIDIA for a few weeks or so.

U.K. Considers Blocking Nvidia Takeover of Arm Over Security

https://finance.yahoo.com/news/u-k-considers-blocking-nvidia-154848795.html

(BOLD is my opinion OR what I consider important content)

"(Bloomberg) -- The U.K. is considering blocking a takeover of Arm Ltd. by Nvidia Corp. due to potential risks to national security, according to people familiar with the discussions.

Nvidia, the biggest U.S. chip company by market capitalization, announced in September a $40 billion deal to acquire Arm from Japan’s SoftBank Group Corp., as part of a push to spread its reach in the surging market for semiconductors. SoftBank has been selling assets to raise cash for buybacks and fresh investments in startups.

In April, U.K. Culture Secretary Oliver Dowden asked the Competition and Markets Authority (CMA) to prepare a report on whether the deal could be deemed anti-competitive, along with a summary of any national security concerns raised by third parties.

The assessment, delivered in late July, contains worrying implications for national security and the U.K. is currently inclined to reject the takeover, a person familiar with government discussions said. The U.K. is likely to conduct a deeper review into the merger due to national security issues, a separate person said.

No final decision has been taken, and the U.K. could still approve the deal alongside certain conditions, the people added. Dowden is set to decide on whether the merger needs further examination by the U.K.’s competition authorities.

“We continue to work through the regulatory process with the U.K. government,” said an Nvidia spokesperson in a statement. “We look forward to their questions and expect to resolve any issues they may have.”

Shares in Nvidia were little changed on Tuesday, while SoftBank fell 1.5% in Tokyo on Wednesday.

“If regulators do block the deal, it will impede Nvidia’s ability to dominate the computing-chip market, but we believe investors already had low expectations that the deal would be completed.”

Anand Srinivasan, BI senior semiconductors industry analyst

Chip Technology

A spokesperson for the CMA declined to comment. A U.K. official declined to comment.

Arm owns the most widely-used set of standards and designs in the $400-billion chip industry. Its technology is at the heart of most of the world’s smartphones and is finding an increasing role in computing, including in server machinery that runs corporate and government systems.

The Cambridge-based company has acted as a neutral party which sells chip blueprints and licenses its standards to a wide range of major technology companies, many of whom are fierce competitors. Ownership by Japan’s SoftBank, which acquired it in 2016 and which doesn’t overlap with Arm’s customers, has preserved that neutrality.

It is unclear how ARM’s change from Japanese to American ownership will affect U.K. national security. However, since SoftBank’s acquisition, the semiconductor technology has become a new focus for politicians.

The chip industry became a central part of former President Donald Trump’s trade war with China and the U.S. has taken action to restrict that country’s access to know-how that’s primarily owned by the U.S. companies that dominate the industry. U.S. government restrictions on the sale of chip technology to China already govern some of Arm’s inventions, as the company has operations there.

Newport Wafer Fab Ltd., based in Wales, is currently under review from the U.K. government after it agreed to be sold to a Chinese manufacturer for around 63 million pounds ($87 million).

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Arm’s position at the heart of the chipmaking industry means the deal has already raised concerns, because Nvidia directly competes with Arm’s customers like Qualcomm Inc., Intel Corp. and Advanced Micro Devices Inc. Others have publicly endorsed the change of ownership.

Some of Nvidia’s rivals have said they would be ready to invest in Arm to help it continue independently, if Nvidia isn’t allowed to buy it. The deal is also subject to regulatory approvals in China, the European Union and the U.S.

Nvidia has pledged to maintain Arm’s independence if the takeover is completed and invest heavily to increase its reach. But any takeover deal is likely to attach conditions such as maintaining the about 3,000 U.K. staff, and keeping the company’s headquarters in Cambridge.

Nvidia Chief Executive Officer Jensen Huang has said he remains confident that regulators will approve the company’s acquisition of Arm.

Ever since SoftBank acquired Arm for $32 billion in 2016, its founder Masayoshi Son has positioned the chip designer as the cornerstone for his strategy of investing in AI-driven startups. Arm accounted for about 10% of SoftBank’s net asset value as of the end of March, its third-largest shareholding after Alibaba Group Holding Ltd. and the Vision Fund investment unit.

Son has been stepping up startup investments through his Vision Fund 2 and the money from an Arm sale could help finance that effort. Nvidia has committed to paying SoftBank $2 billion whether the acquisition goes through or not.

If the deal is blocked by regulators, SoftBank is likely to pursue an IPO of ARM, according to two people familiar with the matter. In a blog post in July, ARM CEO Simon Segars said, “The combination of Arm and NVIDIA is a better outcome than an IPO.”"

MY COMMENT

There is NOTHING certain in this article and little that is couched in any sort of....probability. If the acquisition is rejected it will no doubt be a HIT to NVIDIA.

I dont trust this sort of article.....it may be an attempt to talk down the deal by those with an AX TO GRIND....disguised as a news article. There is not a lot of substance here. BUT.....it should be a warning to those that are thinking about NVIDIA or own it.......that this merger is at best probably.....50/50.